This document responds to the Board’s request to the Secretariat to address policy matters related to the investment framework, including steps to enhance the climate rationale of GCF-supported activities (see decision B.19/06). This terminology is used to reflect the Board decision and on the understanding that it was not intended to set out any new project selection or eligibility criteria for GCF funding. Rather, it was intended to strengthen the ability of AEs to clearly demonstrate the climate impact potential of proposals. Given that no new eligibility criteria are implied, and following extensive consultation, this paper proposes a working definition of climate rationale as the overarching narrative of a proposal which ensures that it addresses climate change and thus contributes to the criteria of the GCF Investment Framework. This paper sets out principles-based guidance for demonstrating the climate rationale for both mitigation and adaptation which will promote a transparent and consistent approach to the assessment of funding proposals. It also describes further action that the Secretariat will take, in close cooperation with the TAP and the wider expert community, to develop dynamic online resources to assist countries and AEs employ the guidance.